As we navigate the volatility of the 2026 Iran conflict, many investors are panicking. However, for those of us with a long-term horizon (like my own 2035 retirement goal), these "red days" are often the best entry points. Today, I want to talk about my favorite vehicle for US exposure: SPYL (SPDR S&P 500 UCITS ETF).
1. The Ultra-Low Cost Advantage
In the world of investing, fees are the silent killers of compounding. Most S&P 500 ETFs (like the famous VOO) have an expense ratio of 0.03%. SPYL matches this with a 0.03% p.a. Expense Ratio.
For every RM10,000 you invest, you only pay RM3 per year in management fees. This is significantly cheaper than local unit trusts which often charge 1.5% to 2.0%.
2. The "Irish Domicile" Tax Trick
As a Malaysian investor, if you buy US-domiciled ETFs like VOO or SPY, the US government takes a 30% withholding tax on your dividends. Because SPYL is domiciled in Ireland, it benefits from the US-Ireland tax treaty. This reduces the dividend withholding tax to 15%. Over a 10-year period, this "tax alpha" can add thousands to your portfolio value.
3. Timing the "War Dip"
The table above shows that Q1 2026 has been the first major pullback for SPYL since its launch. Historically, geopolitical shocks create a "V-shape" recovery within 3 to 6 months.
The Opportunity: SPYL is currently trading at roughly a 5% discount from its December 2025 highs.
The Strategy: I am looking toward June 2026 as a critical window. By then, the initial shock of the conflict is usually priced in, and the market begins to focus back on corporate earnings.
4. Is it better than a World ETF?
While World ETFs (like VWRA) offer more diversification, the US market—and specifically the S&P 500—has a proven track record of recovering faster from crises. With SPYL, you are betting on the 500 strongest companies in the world to lead the bounce.
Final Thought: Don't let the headlines scare you out of your strategy. If you are targeting retirement in the next decade, buying quality ETFs at a discount is the most reliable way to ensure your golden years are actually golden.
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***Why did SPYL hit $11.80?The Tariff Announcement (April 2, 2025): The US administration announced sweeping 10% tariffs on almost all imported goods and even higher "reciprocal tariffs" on major trading partners.Market Panic: Investors feared this would stall global economic growth and reignite inflation. Between April 2 and April 9, 2025, the S&P 500 plummeted nearly 19% from its highs.The "V" Recovery: On April 9, 2025, the market hit its absolute low (where you saw that $11.80–$12.00 range). However, as soon as the government announced a "90-day pause" on those tariffs to negotiate deals, the market bounced back 10.8% in just two weeks.